ZEC rebounds 42% as ZODL founder details two-step emergency upgrade

Josh Swihart, founder of Zcash Open Development Lab (ZODL), has provided further details on how the Zcash team resolved a critical vulnerability in the Orchard shielded pool.

In a Sunday post on X, Swihart wrote that the ZODL team has dispatched a two-step emergency upgrade for privacy-focused blockchain network Zcash.

The first step was a soft fork designed to disable Orchard transactions and mitigate the "risk of an exploit without revealing the full scope of the issue before responsible disclosure," said Swihart.

A follow-up hard fork (NU6.2) was activated on June 3 to address the underlying issue and re-enable Orchard transactions, per the post.

The move comes after independent support group Shielded Labs disclosed a severe vulnerability in Zcash's Orchard pool that exposed the network to potential unlimited minting of counterfeit ZEC. The group said the bug had been fixed, and it is unlikely that an actual exploit took place.

Orchard is Zcash's main shielded transaction pool, which enables users to send and receive ZEC with full zero-knowledge privacy. The Orchard circuit is a zero-knowledge proof system that verifies that only valid transactions are included.

Swihart also noted that ZODL actively responded to requests from mining pools and exchanges for code reviews to verify the team's integrity, adding that mining pools ViaBTC and Foundry played a key role in coordinating the response.

ZEC rebounds

Shielded Labs' disclosure of the vulnerability last Thursday rattled market confidence, triggering a more than 50% plunge in ZEC's price from around $630 to a low of roughly $303. 

Many traders, who invested in Zcash's zero-knowledge-backed privacy focus, questioned the protocol's long-term security and reliability. This includes BitMEX Co-founder Arthur Hayes, who announced that he has liquidated his entire ZEC position following the vulnerability disclosure.

ZEC has since recovered partially, rising 13.5% over the past 24 hours to trade at $428.67. This reflects a 41.5% recovery from the June 5 low of $303.

"We resolved the issue, battle-tested our incident support processes, built stronger relationships with others who support the network, tested our own resilience, and unified as a community of builders to agree on a path forward," Swihart wrote.